USD/JPY Steadies Above Key Support, Awaits Fed and Japan Data for Direction
USD/JPY found support above the daily Ichimoku cloud top at 153.88 on Monday, stabilizing after hitting a six-week low.
The pair’s rebound has been limited as risk sentiment remains subdued, with AI-driven equity losses weighing on broader markets. Yen crosses also remain pressured as falling oil prices and expectations for an ECB rate cut on Thursday provide further support for the yen.
Technical Outlook
- Support: The daily cloud top at 153.88 serves as immediate support, with additional protection at 153.72.
- Resistance: Lies at the 55-day moving average at 154.96, with a break above required to encourage bullish momentum.
- Key Level: Further resistance is seen at the January 23 high of 156.76, a level that could signal a shift back to bullish sentiment.
Upcoming Events
The Fed’s policy decision on Wednesday, alongside U.S. Q4 GDP, December PCE, and jobless claims, will provide insights into the health of the U.S. economy. Any signs of dovishness from Fed Chair Powell could weigh on the dollar.
On the Japanese side, services PPI on Tuesday and Tokyo CPI on Friday will offer clues about the Bank of Japan’s policy outlook, with upside surprises potentially accelerating expectations for a December rate hike.
Conclusion
Until these events unfold, USD/JPY is likely to hover within its current range.